Despite my earlier doubts, Lake Norman logged in another impressive number of home sales in July making this the 7th month in a row where we beat 2014 closed sales. This July was also the strongest July for single family home sales since 2005 even exceeding 2006! (However, July was down 13.5% from June’s truly record breaking 193 sales.) The momentum since January continues for our Lake Norman real estate market and our new “under contract” numbers indicate that we should have another good showing for the next several months at least. Our year-to-date 2015 closed single family home sales are 16.5% higher than 2014’s. Lake Norman’s housing market got crazy busy (my technical term for it) right after the holidays and unlike previous years has been consistently strong every month so far in 2015. Plus, our new contracts indicate that this trend will continue for at least another month or two. Let’s take a closer look:
* All data is from the Carolina Multiple Listing Service.
Some significant additional statistics for you:
- “Distressed sales” (Foreclosures (REO’S), defaults, Short Sales) represented 3.5 % of Lake Norman’s total July home sales. We had just 6 distressed sales with an average price of $371,796. (The highest closed sale price was $813,75). Distressed active listings currently comprise only 1.1% of our total inventory of Lake Norman homes for sale. Clearly distressed sales continue to play an insignificant role in our Lake Norman real estate market and this is very good news!
- Waterfront homes were 25.7% of our July home sales while they currently comprise 41.4% of our active listings. The average sales price of a waterfront home in July was $930,519 and the average price per square foot was $211.58. It took on average 140 days for a waterfront home to sell and they sold for 95% of the listing price. While, overall, waterfront homes sales still aren’t selling at the rates they were pre-recession, they are improving slowly. We currently have 74 waterfront homes under contract. At 8.9 months of supply of active listings our waterfront homes remain in a buyer’s market overall but there are price ranges and locations where they are in a seller’s market.
- 19 new construction homes closed in July through our MLS but this does not reflect an accurate picture of new home sales since so many are custom or are purchased directly from the builders and therefore never enter the MLS. (In fact, this segment of the market may be skewing our Lake Norman home sales numbers quite a bit). The average listing price vs sales price of new construction single family homes was 99%. Clearly there isn’t a lot of wiggle room on prices of new homes! We currently have 71 new construction homes under contract in the MLS. The average sales price in July logged in at $393,356. The bulk of our new construction market in the MLS is still in our lower to price ranges.
- 50.2% of Lake Norman’s July single family home sales were under $400,000 which was a slightly higher than last month’s.
- 63.4% of Lake Norman home sales in July were under $500,000 which is just about equal to last month’s.
- Our “Under Contract Show” AND “Under Contract No show”/Pending sales combined total of 286 is almost equal to last month’s and is about 10% higher that the past two August 6th’s. Our new contracts indicate our Lake Norman housing market still has some serious momentum which is going to carry forward for at least two more months.
A closer look at the chart:
- The number of Active Listings today in Lake Norman is a substantial 15% lower than last year’s. Our absorption rate/months of supply of active listings is down to 5.5 which puts Lake Norman slightly in a seller’s housing market. Within specific price ranges, however, there are swings from a buyer’s market to balanced to a seller’s market.
- Under Contract Show (conditional sales), are up 14% versus this time last year.These are homes that just went under contract (have an accepted offer) and still have financial and inspection conditions. They represent future closed sales most likely in late August/September. This number would indicate that this month’s closed sales should exceed last August’s. After a bit of a drop off in January, our Lake Norman’s housing market has performed at it’s most consistently strong pace since the recession despite the lack of a good number of fresh new listings. If you read my post: Really Cool Real Life Examples of Home Values Trends in Lake Norman you will know that a lot of our new listings are selling VERY quickly and at higher prices. I feel that we have two different markets right now in Lake Norman. There are new listings that are priced right that are selling in just a matter of days and then there are the older listings and high-end luxury estates that are still struggling.
- Pending/Under Contract No Show sales are up just 3%. These listings went under contract on average in only 81 days. These are the contracts that are past their inspection/due diligence periods and are just waiting to close. They are usually the best indication of closed sales in the next few weeks. We are up against 142 closed sales from last August but our pending and under contract numbers seem to indicate we will at least match those numbers. We’ll see!
- Lake Norman’s closed home sales in as of today and as stated above, were an impressive 11% higher than last year’s. (Don’t forget that this number will go up a bit as slower agents log in their sales.) As I said at the opening, July turned out to be the best July since 2005. The average sales price was up 6% compared to last July’s and the average days on market was down 12%. Sales up, prices up and days on market down: you can’t ask for better than that!
The total number of Lake Norman homes under contract (UCS + UCNS) in the first week of each month are as follows:
- August 6,2015: 286
- July 6, 2015 287
- June 6, 2015: 304
- May 6, 2015: 313
- April 6, 2015: 272
- March 6, 2015: 228
- February 6, 2015: 204
- January 6, 2015: 154
- December 6, 2014: 204
- November 6, 2014: 221
- October 4, 2014: 275
- September 6, 2014: 272
- August 6, 2014: 261
- July 7, 2014: 268
- June 5, 2014: 262
- May 6, 2014: 274
- April 6, 2014: 243
- March 6, 2014: 187
- February 6, 2014: 185
- January 6, 2014: 155
- December 6, 2013: 197
- November 6, 2013: 207
- October 6, 2013: 207
- September 6, 2013: 218
- August 6, 2013: 264
- July 6, 2013: 271
- June 6, 2013: 293
- May 6, 2013: 316
Here is a breakdown by price-range of our July 2015 closed sales in Lake Norman
- $65,000 – $99,999: 2
- $100,000 – $199,999: 12-
- $200,000 – $299,999: 32-
- $300,000 – $399,999 37++
(These price ranges represented 50.3% of our July home sales which is up slightly from last month’s.)
- $400,000 – $499,999: 22-
- $500,000 – $599,999: 10
(These price ranges represented 19.1% which is slightly lower than last month’s )
- $600,000 – $699,999: 12-
- $700,000 – $799,999: 10++
- $800,000 – $899,999: 10+
- 900,000 – $999,999: 3-
(These price ranges represented 21.0% which is about equal to last month’s )
- $1,000,000 – $1,499,999: 10
- $1,500,000 – $1,999,999: 2
- $2 million+ : 3
(#Solds $1 million+ = 9.0% compared to last month’s 7.0%)
The stand out price ranges in July in all of Lake Norman were the $300,000’s, $700,000’s, the $800,000’s, and a slight improvement in luxury properties over $1,000,000.
Higher-end home sales in Lake Norman
While not stellar, our higher-end home sales are improving. The once almost non-existent price ranges of $700,000-900,000 have come back to life. There are currently 20 properties listed over $1 million under contract of which only 8 are above $1.5 million. We have 24 properties between $700,000 -$995,000 under contract compared to last month’s 36. Still not as consistent as I would like to see.
Lake Norman’s Waterfront Housing Market
Our waterfront housing market is still overall in a buyer’s market. As of today we have 74 waterfront properties under contract up one from 73 last month. I have been showing waterfronts in all price ranges and I am noticing quite a bit of activity especially on new listings. While the inventory looks high by the numbers, the selection of good waterfront homes in affordable price ranges are low. We currently have 383 waterfront homes actively listed for sale on Lake Norman. With 43 closed sales of waterfront homes in July this means Lake Norman currently has 8.9 months of inventory of waterfront homes for sale so this niche remains overall in a buyer’s market but within certain price ranges and with new listings it is getting quite heated.
In the meantime, new construction on the water is everywhere. Folks are gobbling up waterfront tear-downs and now even considering older homes that need renovations. If you drive or cycle like I do around the waterfront neighborhoods you will see a lot of new construction on the water. If you are reading this and you are a potential waterfront buyer I would encourage you to take advantage of what is available as prices are going up.
11-Year Comparison of Lake Norman Home Sales By Month
* Please note that all of my numbers are for single family homes. They come from the Carolina Multiple Listing Service and will not include sales that took place outside of our MLS.** I adjust past months when I do the monthly update as a few more sales are usually input late by agents. ***With our new MLS Matix program there are some variances in numbers but I am not going to go back to prior years and adjust.
I love this chart of our sales by month since 2005 as it really gives us a good sense of where we are today and where we were over the past 11 years. With 7 months now under our belts, our sales have exceeded all post recession years and are only 3% off of the 2007 numbers. We are out performing 2014 handily so it will be very interesting to watch as 2015 continues after such a strong first half. Will we be able to reach last year’s strong 4th quarter numbers?
Summary and My Insight
Good signs/news remains the same as last month:
- Lake Norman’s inventory of active listings remains low with only 5.5 months of supply.
- Our “trade-up” market is gaining steam.
- The number of distressed homes for sale remain so low that they are truly irrelevant and did not play any perceptible role in our Lake Norman housing market.
- New construction is definitely back. Custom and smaller groups of spec homes are popping up all over Lake Norman. Builders are telling me that they could built twice as many as they are if it weren’t for the shortage of qualified labor.
- Waterfront tear-downs and lots are selling. More buyers are willing to build or do major renovations if they can get “good” waterfront lots.
- New listings that are in good condition and in desirable locations are selling within days of hitting the MLS.
- Economists say that continued housing improvement depends on fundamentals like job growth, rising incomes and low vacancy rates all of which the greater Lake Norman and Charlotte area are experiencing.
- The Lake Norman, Mooresville, Charlotte area is consistently announcing new businesses relocating or starting up in our area.
- Jumbo loan interest rates are still LOWER than conforming loan’s.
- I have personally experienced a marked increase in the number of calls from buyers from out-of-state planning to move to Lake Norman since the early January.Because sales and prices are up in many states that feed relocating buyers to our Lake Norman area, more homeowners are able to sell and move now than in the past 5 years.
Challenges/Weaknesses also the same as last month:
- Interest rates are beginning to creep up.
- Waterfront home sales continue to be weaker than historical numbers in Lake Norman, particularly in the higher price ranges.
- Lake Norman’s luxury home sales are still struggling.
- Lake Norman home prices are increasing in a rather inconsistent pattern and in different locations and price ranges. At the same time, according to economists, home prices in the entire US are expected to rise about 4.5%.
- Existing home sales are being challenged by new construction! In head to head competitions new construction usually wins which hurts resale homes in the same or similar communities.
- While easing a bit, strict loan standards are still making it more difficult of buyers to qualify despite some easing and modifications.
- Finding the perfect home has become more difficult because much of the older inventory has been picked over. Buyers who want perfection can’t wait too long to make decisions about new listings because the good homes and lots are selling very quickly. Watching the “hot sheet” is once again a part of the buying process. Don’t procrastinate when considering a new listing because they are selling quickly!
- On the flip side, higher-end properties are simply taking much longer to sell.
- No matter how hard I try to provide you with the most accurate and insightful data, it is critical to know your own niche because there are so many variables in the Lake Norman housing market. Don’t assume all price ranges and locations are equal. You might be facing multiple offers and/or picked over inventory or you might not.
Final thoughts: Officially we are now past the strongest selling season for Lake Norman homes. However, if you look at the green and yellow chart above you will see that historically we can also see really solid sales numbers in the fall. I expect us to continue to have an active market through the end of the year. With bargains gone and sales up now is the time to act VERY quickly when you find a home that suits you. I have out-of-state buyers who have their “favorites” list planned for their visits only to see a good number of them going under contract before they have a chance to see them. If you are looking in a “HOT” neighborhood and price range be prepared to make an offer quickly. Have your pre-approval letter in hand before even looking at homes.. These are new times so make sure you know what is happening right now in your market niche! While your perfect home might come along, don’t wait too long and don’t dismiss a property if it isn’t perfect. Prioritize: Location, quality and depth of water (if waterfront buyer), lot and floor plan. Then, to determine a realistic price, use VERY RECENT comparable sales in your specific market niche. The selection may not be great but with interest rates near all time lows and prices low but rising it is still a great time to buy. With less than 3% of Lake Norman’s current listings being distressed (foreclosures, short sales etc.) don’t expect a “bargain” to come along at an unrealistic price.
Don’t focus as much on the price as on the future marketability of the property. A bargain that has incurable issues that will make it difficult to resale, really isn’t a bargain at all. Be smart!
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